The third-largest U.S.-based member of Big Oil, ConocoPhillips (NYSE: COP), led the industry's news parade Wednesday with its position among Western companies operating in Libya hit by international sanctions. At the same time, the company disclosed during an annual session with analysts that it will jettison up to $17 billion of its assets during the next three years.

The continued chaos in the Middle East and North Africa -- especially in Libya -- boosted light sweet crude prices Wednesday to $105.75 a barrel, an increase of 0.7% and the highest close since September 2008. While Brent crude slid by just 0.1%, it remained at $115.55 a barrel, essentially preserving the spread between the two key grades of oil. In addition to what has essentially become a civil war in Libya, upheavals or the threat of violence in Bahrain, Saudi Arabia, Syria, Yemen, and Israel continue to render the region a tinderbox, clearly putting additional upward pressure on crude.

Limbo in Libya
In Libya, the U.S. Treasury is now preventing companies based in the United States from doing business with 14 entities that are under the auspices of Libya National Oil Co., commonly referred to as NOC. As a result, companies that collectively operate through a concession know as Waha Oil Co., which is partially owned by Conoco, Marathon Oil (NYSE: MRO), and Hess (NYSE: HES), are being prevented from any sort of transactions with Libya's state-owned companies.

Separately, California-based Occidental Petroleum (NYSE: OXY) is involved in Libya, and its interests in the country are also being placed in limbo by the Treasury Department's edict. The newly dictated status is not inconsequential for the companies. In Hess' case, for instance, 11% of its global proved reserves are being affected.

In addition to the North American companies, the European Union is expected to weigh in with its own sanctions. In advance of the Union's action, Netherlands-based Royal Dutch Shell (NYSE: RDS-B) has already discontinued its relationships with NOC. And while BP (NYSE: BP) said just last week that it considered its contract with NOC to be valid, that position clearly would be altered by a moratorium dictated by the EU.

Shrinking in Manhattan
For ConocoPhillips, however, the Middle East did not provide all of the day's news. At a New York meeting, CEO Jim Mulva told analysts that the company intends to unload $12 billion to $17 billion in assets during the next three years. And while earlier expectations indicated that the company would defer sales of refining assets until next year, it now appears that a minimum of $1 billion of downstream properties will be sold this year.

Upstream assets targeted for jettisoning likely include non-core properties in the North Sea, along with other non-strategic assets in North America. Just last month, the company announced that it would sell 15% of a liquefied natural gas project in Australia to Sinopec (NYSE: SNP)

The sales are part of a "shrink-to-grow" strategy that Conoco initiated last year. During 2010, the company sold about $7 billion in assets, along with the $8.3 billion it generated by selling its 20% interest in OAO Lukoil, the big Russia oil company.

Mulva also told those attending the company's session that he anticipates that, once the sales are completed, production of oil and gas will dip to about 1.6 million or 1.7 million barrels of oil equivalent per day by 2013, a range that compares to 1.75 million equivalent barrels in 2010. At the same time, however, he forecast that growth in Conoco's longer-term output would reach 2% to 3% annually as new projects come on stream in the North Sea, Asia, and the U.S.

Shelling out for shale
As with many major and independent companies, Conoco has become attracted to unconventional plays in the U.S. that are especially rich in oil and other liquids. As such, Mulva predicted the company will increase its spending by fully 50% this year in such U.S. liquids-rich shale plays as Texas' Eagle Ford and the Bakken formation in North Dakota and Montana. Fortunately for now, the company's interests in the Gulf of Mexico are hardly overwhelming.

Internationally, the company expects to invest about $1.4 billion in the Australia Pacific LNG (APLNG) coal seam gas to liquefied natural gas project. There's also a likelihood that its exploratory efforts will increase in Kazakhstan and that it may enter into a new production sharing agreement in Turkmenistan.

From the standpoint of total expenditures, the company likely will allocate about $11 billion annually through next year to share buybacks. At the same time, it expects to spend about $13.5 billion on capital projects this year, with that amount anticipated to edge up slightly to $14 billion or $15 billion from 2012 through 2015.

Since it's spring and pruning is on my mind, I must admit to reacting positively to the ConocoPhillips "shrink-to-grow" program, which, after all, is a form of corporate pruning. Given the company's plans to dispose of non-core assets, its plans for the application of the resulting funds, and the northerly movement of crude prices, I'd urge Fools to find a spot on their watchlists for this active and forward-looking member of Big Oil. Click here to put ConocoPhillips on your personalized Fool watchlist.

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We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Fool contributor David Lee Smith doesn't own shares in any of the companies named above. The Motley Fool has a disclosure policy.